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THE LEGAL POSITION OF THE PARTIES TO A CONCESSION CONTRACT FOR CONSTRUCTION WORKS OR SERVICES CONCLUDED WITH REGARD TO TASKS CARRIED OUT BY LOCAL AUTHORITIES

Source

Abstract

Territorial self-government units are required by the legislator to co-operate with entrepreneurs in respect of fulfilment of their public tasks in the best interests of local community members. One of the forms of legal co-operation between territorial self-government units and entrepreneurs are contracts awarded to the said entrepreneurs for the fulfilment of the units' own tasks, which may include works or service concession contracts entered into pursuant to the provisions of the Act of 9 January 2009 on Works or Service Concessions (Journal of Laws No. 19, Item 101, as amended). Under such a concession contract, the concessionaire (entrepreneur) undertakes to the grantor (public entity) that it will perform the object of concession, i.e. the works or services, for a consideration that will consist either solely in the right to exploit the work, and enjoy the profits thereof, or in this right together with payment from the grantor in the case of a works concession, or either solely in the right to perform the services, and enjoy the profits thereof, or in this right together with payment from the grantor in the case of a service concession. An essential characteristic of the works or service concession contract is the fact that the concessionaire assumes a significant portion of economic risk relating to the concession, i.e. the uncertainty as to whether or not the concession will prove to be profitable to the concessionaire and, consequently, whether or not the concessionaire will recover the costs of the work or service and earn the additionally anticipated profit (concessionaire's consideration) resulting from the right to exploit the work or service and comprised of the fees that the concessionaire will charge to those using the work or service concerned.

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